Predictions 2018

European soccer’s spending splurge will intensify

29 Dec 2017

Transfer fees like the $263 mln Paris St Germain paid Barcelona for Neymar have stoked talk of a bubble. But increased spending is mostly justified by the soaring value of broadcasting rights. If U.S. tech giants join the action in 2018, players will reap the benefits.

As Macau welcomes the humble gambler, bet on MGM

29 Dec 2017

In 2018, poorer customers will outshine high-rollers, who have had an impressive run for the world's largest wagering hub. That would signal a reversal of fortunes for some Macau operators. As it opens a new casino targeting the masses, laggard MGM is poised to hit the jackpot.

Man City can narrow the deficit in Chinese soccer

29 Dec 2017

When it comes to mainland investment in European soccer and vice versa, the score is $3bln-nil. China’s splurge is over, but connecting old teams and new fans still makes sense. The Abu Dhabi-owned group behind Manchester City could be the first heavyweight to go the other way.

U.S. buyback surge will incinerate wealth in 2018

28 Dec 2017

Companies will get a windfall from Republican tax cuts and repatriated profits. The White House claims the money will spur jobs and wages, but a similar Bush policy mostly fueled share repurchases. If GE’s experience is any guide, the largesse will burn value on a grand scale.

Wells Fargo boss will vault over bank’s woes

28 Dec 2017

Tim Sloan will contend for banking’s comeback award in 2018. He struggled in his first year to contain fallout from the lender’s fake-accounts fiasco, but he’s cleaning up the company and, crucially, its culture. That should get investors, regulators and customers back onside.

Temperance is the new craft beer for drinks groups

28 Dec 2017

Health awareness and restrained young drinkers are driving demand for booze-free tipples. Growth in volumes of low-alcohol beer will outstrip traditional drinks fivefold next year. It’s a new source of expansion for global companies as the craft beer craze loses its froth.

Bank clients will learn the value of data in 2018

28 Dec 2017

New EU regulations will force lenders to share account information with competitors - subject to savers’ consent. Up to two-fifths of banks’ revenue could be at stake. New entrants will need to overcome privacy concerns. Even so, customers will discover what their data is worth.

China will pull private capital into state orbit

27 Dec 2017

Beijing's mixed-ownership policy push will see private firms fed shares in government-owned enterprises like oil giant CNPC. Further blurring lines between public interest and profit won't do much for efficiency, but buyers will get insurance against political risk.

Samsung soups up for car race of the future

28 Dec 2017

Slowing growth in smartphones and chips will steer the tech giant to focus on autonomous vehicles. But its 2016 purchase of parts-maker Harman and small stakes in upstarts aren’t enough to catch up to Intel, Delphi and others. That’ll require bolder driving skills.

Once-stodgy banks will gain upper hand in fintech

27 Dec 2017

Scandals hit SoFi and Lending Club. Earnest’s down-round sale showed building scale is hard. Such ill fortune is a boon for traditional players as they start cranking out more of their own tech-enabled tools to improve customer service and cut costs. It’s their battle to lose.

Unilever and Nestlé will sidestep supermarkets

27 Dec 2017

The duo’s decade-high operating margins are being squeezed between grocers, who are bargaining harder on price, and new ways of shopping. Selling direct to consumers is one way to reach ambitious profit goals that were set to appease activists. But the strategy is risky.

Regulators will drive next wave of EU bank mergers

27 Dec 2017

Past disasters, fragmented rules and limited cost savings rightly make European lenders wary of cross-border deals. The European Central Bank, however, is eager to see fewer and bigger banks in the euro zone. Mergers will please regulators more than shareholders.

Mega-miners will find good things in small packages

27 Dec 2017

They still depend on moving tonnes cheaply. But with green energy changing demand, big producers must increasingly think like small ones. For companies like Rio Tinto and BHP that will require a change of mindset – and in some cases, leadership.

Xi’s tighter grip will tax Chinese real estate

26 Dec 2017

The president will sideline traditional policy shops, in particular the Ministry of Finance, and assign policymaking to opaque smaller groups. That will accelerate some reforms, in particular the long-discussed national property tax, which could squeeze the housing market.

Credit markets will enjoy one last hurrah

26 Dec 2017

Healthy global growth will make chief executives and buyout firms more willing to take risks and keep a lid on defaults. There’s also a case for locking in cheap borrowing costs before central banks become less generous. But the next wave of blowups is building.

Musical debuts will produce financial syncopation

26 Dec 2017

Look for Spotify and Vivendi's Universal to float in 2018, thus presenting investors with a choice of content versus distribution. One is an unprofitable tech darling, the other a cash-generative rebound story. Both will be valued too richly, and Spotify is more apt to fall flat.

Even rich geeks can’t escape the Grim Reaper

22 Dec 2017

Silicon Valley’s best and brightest have earned fortunes by solving complex problems. Now many are turning brains and wealth toward conquering death. Applying an engineering mindset to health issues may benefit humanity, but it’s more likely to burn capital than discover the fountain of youth.

Big Oil’s discipline reinforces shale’s swing role

22 Dec 2017

OPEC’s restraint has put a floor under the price of crude, but big oil companies will put a lid on it in 2018. Majors worried about oversupply will tighten budgets and focus on areas with quick payback. U.S. shale will be the big beneficiary, reinforcing its global influence.

Bank compliance-cost explosion will abate in 2018

22 Dec 2017

Next year watchdogs will finalise big set-piece regimes for capital levels and investor protection. For banks from JPMorgan to HSBC, rampant growth in spending on due diligence, reporting and the like will level off. That in turn should be positive for lending margins.

Britain will take the high road out of the EU

22 Dec 2017

Leaving the European Union will hurt manufacturing and financial services and make the government more willing to explore controversial ideas to help the economy. Legalising cannabis would help employment, lift tax revenues and reduce law enforcement costs.